Later this year, Apple will initiate a dividend and share repurchase program, spending $45 billion over the next three years, the company announced on Monday.

Apple's new quarterly dividend will amount to $2.65 per share. Assuming it is approved by the company's board of directors, it will be initiated at some point in the company's fourth quarter of fiscal 2012, which begins on July 1 of this year.

The dividend will be joined by a $10 billion share repurchase program that will start with Apple's fiscal 2013. The share repurchase program has already been authorized by the company's board of directors.

Apple plans to repurchase shares over three years, with the primary objective to neutralize the impact of dilution from future employee equity grants and employe stock purchase programs.

"We have used some of our cash to make great investments in our business through increased research and development, acquisitions, new retail store openings, strategic prepayments and capital expenditures in our supply chain, and building out our infrastructure," Apple Chief Executive Tim Cook said. "You'll see more of all of these in the future. Even with these investments, we can maintain a war chest for strategic opportunities and have plenty of cash to run our business. So we are going to initiate a dividend and share repurchase program."

More details on the new initiatives will be discussed during a conference call that Cook and Apple Chief Financial Officer Peter Oppenheimer will participate in at 9 a.m. Eastern, 6 a.m. Pacific Monday morning. The company will not, however, provide any updates on its current quarter, and no topics other than cash will be discussed.

"Combining dividends, share repurchases, and cash used to net-share-settle vesting RSUs, we anticipate utilizing approximately $45 billion of domestic cash in the first three years of our programs," Oppenheimer said. "We are extremely confident in our future and see tremendous opportunities ahead."

It would be nice if they instituted a DRIP. I would like to buy each of my kids a share and teach them about investing and compounding interest/dividends. It's more fun with a stock than a savings account.

I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...

I thought the conference doesn't start for another 10 min... why are are already getting the news already?

Companies tend to allow journalists to publish the information shortly before the actual event sometimes through a press release. It's a common practice in an attempt to get more coverage for what the company deems good news.

I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...

They don't force you to sell. They buy them from willing sellers at market value.

I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...

You don't have to do anything. It's entirely voluntary. There'll be enough people wanting to sell their holdings for Apple to meet its $10B buyback goal.

You'll get a dividend check for 60*2.65*4 = $636 in 2012. Almost enough for a new iPad, after taxes!

I've no idea what all this means, so would someone with some economic knowledge kindly explain what this means for someone who has a small holding of 60 shares from ages back? Does Apple just force me to sell them back to them? Sorry for being ignorant...

Apple won't force you to sell them back, but they will make a nice offer to all shareholders to entice them to sell back shares. Once they buy back a set amount of shares at a raised price that is it, at least for now.

Depending on how much you bought your shares at, it may make more sense to take that higher value buyback and then also re-invest that money into apple stock for more shares and an increased dividend payout each quarter. But consult with a financial adviser/planner before doing anything.

It would be nice if they instituted a DRIP. I would like to buy each of my kids a share and teach them about investing and compounding interest/dividends. It's more fun with a stock than a savings account.

One of the reasons I wanted a large split was to setup investment accounts for my grandkids... at $600 a pop there wouldn't be much room for action...

They each have saving accounts -- but that's just a lay-away for future needs (car, insurance, etc.).

My Dad had shares of Southern Cal Edison that offered dividend reinvestment at a fixed grant price for a period of time... He was able to accumulate shares at a fraction of their price in an up market...

That could be a great deal for AAPL investors!

"Swift generally gets you to the right way much quicker." - auxio -

"The perfect [birth]day -- A little playtime, a good poop, and a long nap." - Tomato Greeting Cards -

Not being an investor - although I was - I don't really care. I think that stock buybacks just make money disappear - it shouldn't even lead to a stock increase as the drop in cash assets should be exactly counteracted by the reduction in the amount of stock available - leading, in theory - to no stock price gains.

Dividends are for mature companies, sure Apple has been around for a while, but is it not a perennial startup in mentality?

Not overly pleased. I can see Apple - a small company in its core divisions - becoming a huge juggernaught. This and the new Large building might make it suffer the consequences of all huge corporations, static and slow reaction times, fiefdoms, etc.

It would be nice if they instituted a DRIP. I would like to buy each of my kids a share and teach them about investing and compounding interest/dividends. It's more fun with a stock than a savings account.

How do stock brokers feel about DRIPs? don't they cut them off from getting commissions?

One of the reasons I wanted a large split was to setup investment accounts for my grandkids... at $600 a pop there wouldn't be much room for action...

They each have saving accounts -- but that's just a lay-away for future needs (car, insurance, etc.).

My Dad had shares of Southern Cal Edison that offered dividend reinvestment at a fixed grant price for a period of time... He was able to accumulate shares at a fraction of their price in an up market...

That could be a great deal for AAPL investors!

Assuming you're in the USA, if you are wanting to set something up for your grandkids, I'd suggest creating 529 plans for them instead. You'd probably have to sell some/all the Apple stock, ( as 529 plans have to be funded with cash only ) but you could fund it with the dividends if you wanted or some combination of the two.
Hopefully your state has a good plan where you'll get a tax deduction for it as well.

Assuming you're in the USA, if you are wanting to set something up for your grandkids, I'd suggest creating 529 plans for them instead. You'd probably have to sell some/all the Apple stock, ( as 529 plans have to be funded with cash only ) but you could fund it with the dividends if you wanted or some combination of the two.
Hopefully your state has a good plan where you'll get a tax deduction for it as well.

Oops! Looks like the discussion has moved here. Anyway, to quote my last post In the other thread:

The buyback portion of this isn't as bad as I thought it could be. They ate mostly accounting for share growth due to compensation. So it's not an unneeded attempt to increase equity per share. It's an attempt to maintain equity per share.

but how does the buy back help the investor, future investor and the company??

It's simply supply/demand. Reducing the available shares increases the EPS (earnings per share) and reduces the multiple the stock trades at PE (price to earnings) making the stock a better value. It guarantees nothing though, just look at msft. They have spent a fortune on stock buybacks and the stock has done nothing.

A buyback at $600 a share for AAPL would be totally asinine. The buyback, if ever, should have occurred 4-5 years ago. The power of it would have been multiplied. To do it now is pathetic.

No it's not. They have to do it with the cash available in the US unless they want to pay taxes on the cash over seas. They have to account for how much the dividend and buyback will cost them along with any US investments.

I would rather see Apple stick to their guns despite all the pressure from the investor community. I'd rather see Apple shares go up because of organic growth and not because of dividends. Buybacks are the biggest waste of money - the money will go into thin air when the stock price comes down at some point. I'd rather see Apple end world hunger than pay people who already have a lot of cash to spare. After all they have money to spend on Apple products and Apple shares.